This technical report presents an independent assessment of coal resources and reserves for the Soumber Coal Project in South Gobi Province, Mongolia, as of December 31, 2023.
Report context
BAW Mineral Partners Limited was engaged by SouthGobi Resources Ltd. in November 2023 to prepare this Technical Report with an effective date of December 31, 2023, dated December 2, 2024. The report covers resource estimates and reserve estimates for the Soumber Coal Project, which is comprised of four concessions: Central Soumber, East Soumber, Biluut and Jargalant. The project is situated in the southwestern part of Umnugobi Aimag (South Gobi Province) in Mongolia, approximately 20 km east of the Ovoot Tolgoi Coal Mine and about 50 km north of the Mongolian-PRC border at Ceke. SouthGobi Sands LLC, a wholly owned subsidiary of SouthGobi Resources Ltd., holds the mining licenses.
Processing route
Proposed coal processing facilities
As of the effective date, no coal processing has been undertaken for the Coal Project. The report anticipates that certain coal processing facilities will be necessary to meet coal quality specifications required by buyers. These may include a mobile screen, rotary breaker, and wet washing plant, similar to the existing operation at the nearby Ovoot Tolgoi Coal Mine.
Historical testwork: coal quality characterization
The report presents coal quality data obtained from drillhole sampling across multiple periods. For East Soumber, 37 core holes have been used for coal quality analysis, and historical data from 2005 to 2011 along with 2023 borehole sample results are reported. For Biluut and Jargalant, 153 holes have been analyzed. The coal rank of the deposits ranges between low to medium volatile bituminous coal in accordance with ASTM Standard D388.
Mass bulk washability test
A mass bulk washability test was conducted as part of the metallurgical testing program. Coal seam washability LD sample mass data are reported. Individual coal seam washability characterizations were completed for Biluut, East Soumber and Jargalant concessions.
Biluut washability
Biluut borehole sample raw coal washability data and washability analysis from 2010 to 2011 are reported. Composited coal seam washability curves were generated for the Biluut concession.
East Soumber washability and coking properties
East Soumber borehole coal seam washability sample summaries from 2008 to 2011 are reported. East Soumber sub-seam coking property data are provided from both historical testing and 2010 analysis. Additional East Soumber borehole sample raw coal quality data from 2023 are included.
Jargalant washability
Jargalant borehole sample washability analysis results are reported.
Proposed finished coal product
The report provides estimated coal product yields for each concession. Jargalant coal product estimation, East Soumber coal product estimation and Biluut coal product estimation are presented as proposed design estimates.
Proposed intermittent coal processing
The proposed processing route includes intermittent coal handling, though detailed flowsheet information is not provided.
Key reported parameters
| Parameter | Value | Units | Basis |
|---|---|---|---|
| Total Measured and Indicated Surface Resource (East Soumber, Biluut, Jargalant) | 144.51 | Mt | Design estimate as of Dec 31, 2023 |
| Total Inferred Surface Resource | 15.99 | Mt | Design estimate as of Dec 31, 2023 |
| Total Measured and Indicated Underground Resource | 24.01 | Mt | Design estimate as of Dec 31, 2023 |
| Total Inferred Underground Resource | 17.94 | Mt | Design estimate as of Dec 31, 2023 |
| Total Proven and Probable Reserve | 25.14 | Mt | Design estimate as of Dec 31, 2023 |
| Proposed mining method | Open pit terrace truck-and-shovel | proposed design | Proposed design |
| Mining recovery factor applied | 95 | % | Design parameter |
| Mining dilution factor applied | 2.5 | % | Design parameter |
| Cut-off ash content for raw coal | 50 | % | Design assumption |
| Coal price adopted in Reserve estimate | US $90 | US$/t | Design assumption |
| Minimum coal seam thickness for resource estimation | 0.6 | m | Design parameter |
| Maximum coal parting for resource estimation | 0.3 | m | Design parameter |
| Maximum ash content for Measured and Indicated Resource | 50 | % | Design parameter |
| In-pit resource depth constraint | 300 | m below surface | Design constraint |
| Underground resource depth range | 300-500 | m below surface | Design constraint |
| Coal rank | Low to medium volatile bituminous | ASTM Standard D388 | Testwork |
| Overall coal ash content | >20 | % | Testwork |
| Overall coal sulfur content | <1 | % | Testwork |
| Inherent moisture | <1 | % | Testwork |
| Free Swelling Index (FSI) range | <2 (non-coking) to >4 (coking) | Testwork | Not stated |
Project website: https://www.southgobi.com/html/business.php
Technical qualifications
The report relies on expertise and information provided by specialized experts in law, politics, environment, taxation, market analysis, and price forecast. BAW did not independently conduct field work including drilling to confirm the interception of coal seams for resource definition. The geological models do not fully show the complex geological nature of the deposit. The coal deposits at East Soumber, Jargalant and Biluut are classified as "Complex" Geology Type given the presence of folding, faulting, and deformation characteristics. Special protected area status prohibits mining activities within the Central Soumber concession until December 3, 2025, and BAW has opted not to include Resources and Reserves for Central Soumber in this report. No DEIA has been prepared for the Jargalant concession as of the effective date. The DEIA for MV-016869 (East Soumber and Biluut) has not been officially submitted to the Ministry of Environment and Tourism for approval. Mining activities can only commence after the DEIA is approved in accordance with the EIA law of Mongolia.
Source: Soumber Coal Project , 2024 Technical Report, effective December 31, 2023, sections 1, 13, 14, 15, 16, 17, 20, and 26.
